0
What are a business firm's fixed and variable costs of production?
Wiki User
∙ 13y ago
Fixed costs are costs that do not vary with the level of output, such as rent and insurance premiums. Variable costs are costs that change with the level of output, such as wages and raw materials.
Wiki User
∙ 13y ago
Add your answer:
Earn +20 pts
What are total cost of production examples?
In a perfectly competitive market, all n firms are equal. Thus, the market total cost is the total cost (TC) of one firm multiplied by the amount of n firms in the market Total Market Cost =Variable Costs and fixed costs ...Fixed costs plus variable costs.
Who own the factor of production?
Business firms own the factors of production.
Why do firms want to know their average total cost?
Average total cost determines how much profit or loss a firm will make at a certain output and price. It also determines is a firm should shut down, temporarily stopping production (not covering variable costs) but keeping the business (covering fixed costs), or if it should exit the market (not covering variable or fixed costs).
The government must go to business firms to buy resources for production.?
false A+ users ^^
How is a perfectly competitive firms marginal cost curve related to its supply curve?
a perfectly competitive firms supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve (AVC)..this will be due to the firms unwillingness to supply below the price in which they could cover their variable costs
What are total cost of production examples?
In a perfectly competitive market, all n firms are equal. Thus, the market total cost is the total cost (TC) of one firm multiplied by the amount of n firms in the market Total Market Cost =Variable Costs and fixed costs ...Fixed costs plus variable costs.
Who own the factor of production?
Business firms own the factors of production.
Why do firms want to know their average total cost?
Average total cost determines how much profit or loss a firm will make at a certain output and price. It also determines is a firm should shut down, temporarily stopping production (not covering variable costs) but keeping the business (covering fixed costs), or if it should exit the market (not covering variable or fixed costs).
What are examples of total costs?
In a perfectly competitive market, all n firms are equal. Thus, the market total cost is the total cost (TC) of one firm multiplied by the amount of n firms in the market Total Market Cost =Variable Costs and fixed costs ...Fixed costs plus variable costs.
How is CVP impacted by changes in fixed and variable costs?
A change in variable cost affects the contribution margin ratio. A change in fixed cost affects the break-even point . An increase in these costs affect the firms profit.
Firms with a high degree of operating leverage are?
Have a high amount of fixed costs relative to their variable costs. DOL= CM / Net Income We derive CM by the eqaution of Selling Price - Variable Costs If a firm has high variable costs relative to their selling price then they will have a small CM and therefore their DOL will decrease. Have a high amount of fixed costs relative to their variable costs. DOL= CM / Net Income We derive CM by the eqaution of Selling Price - Variable Costs If a firm has high variable costs relative to their selling price then they will have a small CM and therefore their DOL will decrease.
The government must go to business firms to buy resources for production.?
false A+ users ^^
If variable labor costs decline other things are held constant how will this effect a firms breakeven point?
breakeven point will decrease
How is a perfectly competitive firms marginal cost curve related to its supply curve?
a perfectly competitive firms supply curve will be the portion of the marginal cost curve which lies above the average variable cost curve (AVC)..this will be due to the firms unwillingness to supply below the price in which they could cover their variable costs
Definition of private cost in economics?
These are costs that are incurred to an individual or firm when they are carrying out the activities of consumption or production. They are the costs that those individuals or firms have to pay themselves.
Why is it important for business firms to have integrated approach to the management of their activities?
to maximise efficiencies.Efficiencies have direct impact on Costs.
The money spent by firms in order to produce and sell their goods and services is called?
For Plato Users: production costs
